News

June 17, 2014

Elon Musk’s company buying Silevo, one of the ‘Buffalo Billion’ tech firms

By: David Robinson

Source: The Buffalo News

Silevo, the California solar panel manufacturer that is one of two
companies slated to move into the RiverBend clean technology hub in
South Buffalo, is being acquired by SolarCity, a leading solar energy
systems installer.

The $200 million deal would make SolarCity the
most valuable U.S. solar company and extend its operations into the
production of solar panels.

SolarCity executives, in a blog post
announcing the deal this morning, expressed interest in continuing with
Silevo’s plans to build a solar panel manufacturing plant in Buffalo –
and possibly expanding it to become one of the world’s largest solar
panel production facilities.

The RiverBend hub is part of Gov. Andrew Cuomo’s ‘Buffalo Billion’ economic development initiatives.

“We
are in discussions with the state of New York to build the initial
manufacturing plant, continuing a relationship developed by the Silevo
team,” the company said in the post.

SolarCity is led by technology entrepreneur Elon Musk, who also heads the Tesla electric automobile company.

That
initial plant at RiverBend was envisioned to have the annual capacity
to produce enough solar panels to generate 200 megawatts of electricity.
But SolarCity executives said they were interested in expanding the
capacity of that plant to be five times bigger than the original plan.

“At
a targeted capacity greater than 1 gigawatt within the next two years,
it will be one of the single largest solar panel production plants in
the world. This will be followed in subsequent years by one or more
significantly larger plants at an order of magnitude greater annual
production capacity,” SolarCity said.

SolarCity executives said
they view the Silevo acquisition as a key step in their efforts to
reduce the price of solar energy systems to the point where they can
compete with electricity generated from fossil fuels without the
lucrative subsidies that now are needed to offset the higher costs of
solar panels.

By combining Silevo’s technology, which is more
efficient at generating electricity than most other solar panels on the
market today, with lower production costs from the economies of scale
that come from high-volume production, SolarCity executives said they
believe they can make solar systems more affordable.

“What we are
trying to address is not the lay of the land today, where there are
indeed too many suppliers, most of whom are producing relatively low
photonic efficiency solar cells at uncompelling costs, but how we see
the future developing,” the blog post said.

“Without decisive
action to lay the groundwork today, the massive volume of affordable,
high efficiency panels needed for unsubsidized solar power to outcompete
fossil fuel grid power simply will not be there when it is needed,”
said the post.

Under the terms of the deal, the acquisition
price could rise to as much as $350 million if Silevo hits certain
performance targets, which are based on volume and costs.